Investing is gaining importance over the years, especially against the backdrop of negative real interest rates in Singapore.

People want to insure their futures and their families, and they know that, if they are depending on CPF, and in some cases retirement plans, that they may be in for a rude awakening when they no longer have the ability to earn a steady income. Investing is the answer to the unknowns of the future.

You may have been saving money in a low interest savings account over the years. Now, you want to it to grow at a faster pace. Perhaps you’ve inherited money or realized some other type of windfall (eg via en bloc), and you need a way to make that money grow. Again, investing is the answer.

Investing is also a way of attaining the things that you want. These things can be tangible things such as a new home, a college education for your children, or expensive ‘toys.’ They can be intangible things such as more time for your family. Of course, your financial goals, coupled with your risk profile, will determine what type of investing you do.

If you want to make a lot of money fast, you would be more interested in higher risk investing, which will give you a larger return in a shorter amount of time. If you have a longer time horizon and a lower risk profile, you would want to make safer investments that grow over a longer period of time.

The overall purpose in investing is to create wealth and security, over a period of time. It is important to remember that you will not always be able to earn an income… you will eventually want to retire.

You also cannot count on CPF to do what you expect it to do. As we have seen with Lehman, you also cannot necessarily depend on your company’s retirement plan either. So, again, investing is the key to insuring your own financial future, but you must make smart investments!